Hazelden merger helps Betty Ford Center with its recovery

For three decades, alcoholics and addicts sought sobriety in the desert at the famed Betty Ford Center in Rancho Mirage, Calif.

But in recent years, the best-known name in substance abuse recovery lost much of its luster as internal strife, competition from luxury rehab centers, and industry turmoil took their toll. All that led to the once-unimaginable takeover of the center last month by the Hazelden Foundation, another addiction treatment pioneer.

Now Hazelden, a Minnesota nonprofit, is looking to preserve the former first lady's legacy with an ambitious expansion in Southern California and beyond.

Mark Mishek, Hazelden's chief executive and a recovering alcoholic himself, wants to put the Betty Ford name on several new outpatient treatment centers in Santa Monica, Calif.; San Diego; Phoenix; Dallas and potentially elsewhere starting later this year. Mishek pursued a similar expansion strategy at Hazelden after he took the helm there in 2008.

For him, joining forces with the Betty Ford Center was essential for the two nonprofits to remain relevant in the $35 billion addiction treatment industry.

By contrast, the Betty Ford Center never sought to sugarcoat the hard work of recovery or pamper its patients.

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On its well-manicured grounds, patients bunk together two to a room, make their own beds and dine in a cafeteria.

"Nonprofits that have abstinence-based programs that are focused on the 12 Steps of Alcoholics Anonymous need to stick together," Mishek said in his corner office with views of the San Jacinto Mountains. "We are under attack from a competitive perspective."

That wasn't the case when the Betty Ford Center opened in 1982. The former first lady brought addiction treatment into the mainstream by sharing her struggles publicly. Her center quickly became the go-to destination for celebrities whho had hit bottom from alcohol and drugs.

The 160-bed hospital has treated more than 100,000 people and has spawned countless imitators.

But shortly before Ford's death in 2011 and as the industry was rapidly evolving, the center was plagued by infighting on the board and an acrimonious split with Betty Ford's daughter, Susan Ford Bales. She left the board in 2010.

Hazelden's Mishek had to bring the Ford family back into the fold to pull off the deal.

It helped that the Betty Ford Center always had close ties to Hazelden. The first lady visited the Minnesota institution before starting her center, and the Betty Ford Center's longtime chief executive, John Schwarzlose, came from Hazelden.

Vaden Bales, Susan Ford's husband, said they consulted with outside experts last summer when Hazelden approached them with the idea of a merger. He said permission was granted for up to four outpatient centers bearing Betty Ford's name, and they're open to considering more.

The first lady "saw the Betty Ford Center as Harvard and there was only going to be one," said Vaden Bales, a lawyer in Tulsa, Okla. "But if she had been presented with this information from Hazelden, I think she would have made the same decision, no question. She was a really savvy businesswoman."

Many experts praise the Betty Ford Center for being a trailblazer. But they say it's seen by some as too old-school and not keeping up with some medical advances. Even Hazelden allows certain medications to reduce cravings during initial treatment, while the Betty Ford Center staunchly resisted the notion of giving drugs to addicts.

"Betty Ford is so militaristic many people don't go there anymore," said Dr. Akikur Mohammad, chief executive of the Inspire Malibu treatment center.

Gerald Shulman, a longtime behavioral health consultant, said established treatment centers such as Betty Ford are often resistant to change.

"The 12-step model is still very appropriate, but it doesn't suffice for many patients," he said. "My concern is we're still doing 1960s treatment for 2014 patients."

Shulman said Hazelden was in very much the same position as the Betty Ford Center about a decade ago and it has made changes that "make it more relevant to today's patients."

For the year that ended in June 2012, the Betty Ford Center reported a loss of $208,000 on revenue of $39.2 million. Hazelden hit a similar rough patch in 2008, but its financial performance steadily improved. Hazelden's revenue climbed 7 percent in 2012 to $135.8 million and it had operating income of nearly $7 million.

Mishek, 62, is a longtime health care lawyer and former hospital executive in Minnesota. He had strong personal ties to Hazelden before becoming CEO there in 2008. He and his late father, a family doctor, both got sober there.